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The IRS may owe you a refund for penalties and interest—but you must act by July 10, 2026.
A recent tax ruling may allow millions of taxpayers to obtain refunds and abatements of penalties and interest assessed by the IRS during the height of the pandemic.
The ruling stems from Kwong v. United States, in which the court found that, due to the federally declared COVID-19 disaster, the IRS may not have had the authority to assess certain penalties and interest during that period. Specifically, the decision suggests that deadlines falling between January 20, 2020, and May 11, 2023, were effectively postponed, meaning some returns were not considered late until July 10, 2023.
As a result, penalties for late filing, late payment, and certain interest charges assessed during this period may have been applied improperly.
Here’s how this may impact you:
- Applies to both individuals and businesses
- May include penalties and interest assessed for tax years 2019 through 2022
- Covers failure-to-file penalties, failure-to-pay penalties, and estimated tax penalties
What you need to do:
To request relief, you must complete Form 843 (Claim for Refund and Request for Abatement) and submit it to the IRS by July 10, 2026. Missing this deadline could mean forfeiting money you may be entitled to recover.
Important note:
This case is still being litigated, and the IRS has appealed the ruling. If the decision is overturned, the relief may not ultimately apply.
Need help completing Form 843? Book an appointment with Washington CPA Services, LLC.
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